Bankruptcy allows an individual or business to get rid of some or all of its debt. Usually, bankruptcy should only be considered when the debt is completely unmanageable, impossible to pay off, and there are no other options. However, in some cases, the benefits of bankruptcy can considerably outweigh the costs. Bankruptcy is controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Virginia are often the identical as everywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Culpeper, Virginia bankruptcy attorney beforehand.
Chapter 7 Bankruptcy in Culpeper, Virginia
There are 2 typical types of consumer bankruptcy in Culpeper, Virginia: Chapter 7 and 13. Chapter 7 bankruptcy involves a liquidation of some of the debtor's assets, which pays off part of his or her debt. Once this is done, the remaining debt is excused. Fortunately for debtors, many forms of property are exempt from liquidation, including homes, vehicles, necessary personal items, and retirement accounts.
Once appropriate assets are sold, and the money turned over to the creditors, most remaining debt is excused. However, there are certain types of debt that cannot be excused in bankruptcy, including student loans, taxes, child support, and criminal fines. If most of your debt is non-dischargeable, it may not be a good idea to file for bankruptcy in Culpeper, Virginia.
Chapter 13 Bankruptcy in Culpeper, Virginia
Chapter 13 bankruptcy in Culpeper, Virginia is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your specific case. Chapter 13 does not absolve any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Culpeper, Virginia
This depends entirely on the facts of your specific case. If you have a decent amount of stable income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 may be the best option for you. If most of your property is exempt, and you don't have much stable income, Chapter 7 might be the best option.
In any case, it would be a good idea to consult a local bankruptcy lawyer in Culpeper, Virginia. Your lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).